Microsoft CEO Steve Ballmer to retire within the next 12 months

Microsoft CEO Steve Ballmer will step down within 12 months, the company has said. Source: AFP

MICROSOFT CEO Steve Ballmer, who took over the helm of the world's largest software company from founder Bill Gates, will retire within the next 12 months.

Microsoft did not name a successor. The company said it is forming a search committee and Mr Ballmer will stay on until a replacement is found.

Microsoft shares shot up 9 per cent in premarket trading following the news.

Mr Ballmer, 57, met Microsoft founder Bill Gates in 1973 while they were living down a dormitory hall from each other at Harvard University. He joined Microsoft in 1980 to bring some business discipline and salesmanship to a company that had just landed a contract to supply an operating system for a personal computer that IBM would release in 1981.

Mr Ballmer, a zealous executive prone to arm-waving and hollering, did the job so well that he would become Gates' sounding board and succeed him as CEO in 2000.

"It's a tad surprising, but every other business head has been rotated out," said BGC Financial analyst Colin Gillis.

"They swapped out all their segment heads over the past few years. The only one they haven't changed is the CEO."

Though investors cheered the news on Friday, Mr Gillis cautioned that it could be a "tough 12 months" for the company.

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